#1
1. What is the primary role of an agent in a business agency relationship?
To act on behalf of the principal
ExplanationAgents act as representatives for principals.
#2
6. What is the difference between an employee and an independent contractor in an agency relationship?
Employees work under direct control of the principal, while independent contractors have more autonomy.
ExplanationEmployees follow strict control, while contractors have more freedom.
#3
11. What is the concept of agency coupled with an interest?
An agency relationship that involves a financial or property interest of the agent.
ExplanationAgents have vested financial or property interests in agency coupled with an interest.
#4
16. What is the difference between actual authority and apparent authority in an agency relationship?
Actual authority is explicitly granted, while apparent authority is implied by the principal's actions.
ExplanationActual authority is expressly given, whereas apparent authority is inferred from actions.
#5
21. What is the doctrine of respondent superior, and how does it apply to agency relationships?
It holds the principal liable for the agent's actions within the scope of employment.
ExplanationPrincipals bear responsibility for agent's actions during employment.
#6
2. In agency law, what does 'fiduciary duty' refer to?
The duty to act in the best interest of the principal
ExplanationAgents must prioritize their principal's interests.
#7
3. Which type of authority occurs when a principal leads a third party to believe that an agent has certain powers?
Apparent authority
ExplanationApparent authority arises from the principal's actions.
#8
7. What is the concept of ratification in agency law?
The principal's approval of an agent's unauthorized act
ExplanationRatification validates actions initially unauthorized by the principal.
#9
8. How does a disclosed principal affect the liability of an agent in a contract?
The agent is never personally liable, regardless of disclosure.
ExplanationDisclosed principals shield agents from personal liability in contracts.
#10
12. In an agency relationship, what is the significance of the agent's duty of obedience?
The duty to follow the principal's lawful instructions.
ExplanationAgents must comply with all legal instructions from their principal.
#11
13. What is the purpose of the principle of indemnification in agency law?
To require the principal to compensate the agent for losses incurred during the agency.
ExplanationIndemnification obligates principals to reimburse agents for incurred losses.
#12
4. What is the main purpose of a power of attorney in an agency relationship?
To delegate authority to the agent
ExplanationPower of attorney grants legal authority to act on behalf of the principal.
#13
5. In agency law, what is the significance of the 'doctrine of respondeat superior'?
It holds the principal liable for the agent's actions within the scope of employment
ExplanationPrincipals bear responsibility for agents' actions within their duties.
#14
9. What is the purpose of the Statute of Frauds in agency relationships?
To require certain agreements to be in writing to be enforceable.
ExplanationStatute of Frauds mandates written agreements for enforceability.
#15
10. In agency law, what is the significance of the 'doctrine of unincorporated associations'?
It establishes the liability of a group of individuals acting together.
ExplanationDoctrine of unincorporated associations defines liability for collective actions.
#16
14. How does the termination of an agency relationship affect the agent's authority?
The agent's authority is automatically terminated.
ExplanationTermination of agency nullifies the agent's authority automatically.
#17
15. What is the doctrine of sub-agency in agency relationships?
It allows the agent to appoint another agent to act on their behalf.
ExplanationSub-agency permits agents to delegate authority to other agents.